In-Stat Projects Strong Growth in Online Video Market

SCOTTSDALE, August 14:
Revenues from online video around the world will top $4.5 billion by 2012,
according to In-Stat, up from $1.2 billion this year.

The market is expected to
be driven by purchased/rented videos, thanks in part to subscription services
like Netflix. By 2012, 39 percent of adults in the U.S. are expected to have
purchased or rented online video. By then, 90 percent of U.S. households will
have access to broadband, with 94 percent of these individuals watching online
video. Ad-supported professional video from major TV networks will become a
strong revenue contributor by 2012, the report notes.

“What is now seen as a
predominantly younger pastime will spread to encompass a wider group of people,
in part due to the aging of current online video viewers, but also as a result
of word of mouth, spread of services, growth of in-home networks, and new
network-connected consumer electronic devices,” says Gerry Kaufhold, an In-Stat
analyst. “The survey data in a recent In-Stat report indicates that over half
of consumers actually still prefer packaged goods, which bodes well for Blu-ray
discs. Surprisingly, younger people who regularly watch online were the group
that expressed the highest interest in owning a package goods bundle that
includes artwork and extra content.”

—By Mansha Daswani